Bitcoin mining stocks have not fared the best in recent times. Although they were one of the winners of 2021, their fall from grace had been even more rapid than their climb there in the first place. While the digital asset itself was recording losses such as 20%, mining stocks had taken it a step further with more than 60% losses in some cases. And this year, it looks as if these mining stocks are carrying on the same trend given that they remain in the red.
Bitcoin Mining Stocks Suffer
The start of 2022 has been brutal for all cryptocurrencies and bitcoin mining stocks have not been left out of this. On the year-to-date (YTD) scale, mining stocks have not fared so well. The top bitcoin mining stocks continue to trade in the red regardless of whether BTC itself has recovered back into the green or not.
A look at the top 10 bitcoin mining stocks shows a disturbing trend among them. Of the 10 stocks analyzed by Arcane Research in its latest report, only one was found to be trading in the positive, and even then, by only a small margin. Nevertheless, this 1% margin by which Riot is trading in the green is enough to make it the best-performing BTC mining stock in the market.
Other bigger names have declined significantly into the red over the past few months. Marathon, arguably one of the most recognizable names when it comes to mining stocks, holds up the best out of the list, trading at a -5%. The values get increasingly negative as one goes down the list.
Iris Energy saw its number come in at -9% YTD, Hive was at a -14%, Core Scientific came in at a -15%, while Bitfarms and Cipher both recorded -16% in the same time period.
The rest of the list was Hut 8, Northern Data, and Terawulf, all of which saw declines of -20%, -26%, and -36% respectively.
Majority of mining stocks trading in the red | Source: Arcane Research
Not Faring Too Bad
There’s no doubt all the red in the mining stocks market can be daunting but looking at their performance, there have been some important recovery trends. They have followed the price of bitcoin, although not back into the green. However, they remain a long way from where they were during the last market crash in December. These mining stocks have all recovered to some degree in the last two weeks.
One reason why these coins are recording more losses is because of how volatile they are. Bitcoin is known to be a highly volatile asset but these mining stocks take it one step further with their own volatility. They’re usually referred to as “high beta bitcoin investments” given that they follow the price of BTC closely, but to a much higher degree of volatility.
This means that swings in value are much faster compared to bitcoin. Just as the gains can build up fast for bitcoin mining stocks, the same way do the losses come quickly due to this volatility.
BTC settles above $47k | Source: BTCUSD on TradingView.com
Featured image from Bitcoinist, charts from Arcane Research and TradingView.com